Wentz Corporation Has Two Operating Divisions-A Consumer Division and a Commercial

question 3

Multiple Choice

Wentz Corporation has two operating divisions-a Consumer Division and a Commercial Division. The company's Order Fulfillment Department provides services to both divisions. The variable costs of the Order Fulfillment Department are budgeted at $56 per order. The Order Fulfillment Department's fixed costs are budgeted at $190,800 for the year. The fixed costs of the Order Fulfillment Department are determined based on the peak period orders.
At the end of the year, actual Order Fulfillment Department variable costs totaled $206,640 and fixed costs totaled $202,680. The Consumer Division had a total of 1,240 orders and the Commercial Division had a total of 2,360 orders for the year. For purposes of evaluation performance, how much Order Fulfillment Department cost should be charged to the Commercial Division at the end of the year?

• A) $257,240
• B) $246,640
• C) $268,332
• D) $257,072

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Definitions:

Confidence Interval

A span of numerical estimates, calculated using sample data, which probably includes the value of an unspecified parameter within the population.

Regression Line

A line that best fits a set of data points in linear regression analysis, showing the general direction in which the data tend to go.

Prediction Interval

An estimate of the interval within which future observations will fall, with a certain probability, given what has already been observed.

One-Time Occurrence

An event or happening that takes place once and is not repeated.